Effects of Innovation on Employment in Latin America
Peer Reviewed
Date issued
Dec 2012
Subject
Innovation;
Research and Development;
Workforce and Employment
JEL code
J21 - Labor Force and Employment, Size, and Structure;
O12 - Microeconomic Analyses of Economic Development;
O14 - Industrialization • Manufacturing and Service Industries • Choice of Technology;
O31 - Innovation and Invention: Processes and Incentives;
O33 - Technological Change: Choices and Consequences • Diffusion Processes;
O40 - Economic Growth and Aggregate Productivity: General
Country
Argentina;
Chile;
Costa Rica;
Uruguay
Category
Technical Notes
This study examines the impact of process and product innovation on employment growth and composition in Argentina, Chile, Costa Rica, and Uruguay using micro data from innovation surveys. Based on the model put forward by Harrison et al. (1998), employment growth is related to process innovations and to the growth of sales separately due to innovative and unchanged products. Results show that compensation effects are pervasive and that the introduction of new products is associated with employment growth at the firm level. No evidence of displacement effects due to the introduction of product innovations was observed. With respect to the impact of innovation on employment composition, there is scant evidence of a skill bias, although product innovation is more complementary to skilled than to unskilled labor.
